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Skyfall plans to buy a small business for an AI CEO test - RuntimeWire

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Why it matters

Skyfall is putting capital and a real operating business behind the AI CEO claim. The target, baseline and human overrides will determine whether the test proves autonomy or merely showcases automation.

Sam Pasupalak and Kaheer Suleman plan to have Skyfall AI acquire a small B2B SaaS or e-commerce business for up to $1 million, then hand pricing, marketing, customer support, finance and operations to an AI system designed to act as its chief executive.

The founders disclosed the plan in a Forbes interview published July 20. Skyfall wants the system to double the acquired business's revenue while humans progressively withdraw from routine decisions. Pasupalak said Skyfall will publicly document successful calls and failures, turning a live business into a research environment with customers, cash flow and consequences.

Skyfall has yet to name an acquisition target, a closing date or the source of the proposed purchase money. The $1 million figure is a maximum acquisition budget, rather than money Skyfall has already spent or a newly disclosed funding round. Skyfall has not identified outside investors, its valuation or its own revenue.

For Pasupalak and Suleman, the acquisition is a return to the kind of technical bet that defined their first startup. The pair met at the University of Waterloo, where Maluuba grew out of work on natural-language understanding inside Waterloo's Velocity incubator.

Maluuba eventually put its technology on over 50 million smartphones and smart televisions through partnerships with Samsung, LG and BlackBerry, according to a University of Waterloo profile. Microsoft acquired Maluuba in January 2017 to expand its work in machine reading, dialogue and reinforcement learning. Forbes values the transaction at roughly $160 million, though Microsoft disclosed no purchase price.

Pasupalak, who grew up in Bhubaneswar, India, has traced his entrepreneurial ambitions to sneaking into a 2008 Bill Gates talk at Waterloo by posing as a volunteer. After graduating, he slept on friends' couches, flew to Silicon Valley with a ticket bought using a friend's savings and endured hundreds of investor rejections while building Maluuba. Suleman supplied the technical counterweight, leading Maluuba's deep-learning language platform after conducting AI and information-retrieval research at Waterloo.

That history makes Skyfall's proposed experiment unusually credible as a founder bet, even as the technology remains unproven. Pasupalak and Suleman have built and sold an AI research business before. This time, they are wagering capital and an operating asset on the claim that current agent products are solving problems too narrow to produce an autonomous enterprise.

Buying the benchmark

Skyfall's acquisition plan gives Pasupalak and Suleman something most enterprise AI developers lack: control of the environment in which their system operates. Customer deployments usually limit an AI vendor to one workflow, department or tightly defined pilot. The customer keeps authority over strategy, staffing and capital allocation, leaving the vendor unable to test whether its technology can coordinate the business as a whole.

Owning the target would let Skyfall set the objective, connect the system to operating data and decide how quickly humans step back. It would also expose the limits of the experiment. Skyfall will select the business, own the asset and determine the conditions under which its AI is judged. The target's existing revenue, profitability, employee count and growth rate will shape how meaningful a revenue doubling would be, and none of those selection criteria have been disclosed.

A mature SaaS product with stable renewals and limited support demands would present a different management problem from an e-commerce operation dependent on inventory, advertising and logistics. Skyfall's eventual choice will reveal whether the founders are testing strategic judgment or beginning with a business whose operations are already structured for automation.

Pasupalak's stated ambition reaches beyond running one acquisition. "We want to democratize the power of a CEO to all the small businesses around the world," he told Forbes. The practical first step is narrower: determine whether Skyfall's system can improve a small, controlled business while humans retain oversight.

The distinction matters because the phrase "AI CEO" can suggest a legal or organizational handover that Skyfall is not proposing. Humans will still own the business and initially supervise the system....